Is China Prospering Or Just Some Chinese?

Is China Prospering Or Just Some Chinese?

The Darker Side of China’s Economic Miracle

Whats the cost of the Chinas economy growing so much? This 2009 article was posted on AlterNet July 17. The authors newest book is “The Uprising”. He is a fellow at the Campaign for America’s Future and a board member of the Progressive States Network. His blog is at click here.

By David Sirota

Before planning for and making the trans-global trek to the most populous country on Earth, I knew mainland China mostly through television and movie screens. My sinologists were Bruce Lee, Jackie Chan, and Egg Shen, the crotchety shaman from “Big Trouble in Little China” — a Cabinet of advisers who left me, ahem, unprepared for my recent voyage east.

Thus, I was thrilled when, upon arriving here, a Peace Corps volunteer handed me a 1997 tome called “Red China Blues.” Written by Chinese-Canadian journalist Jan Wong, the book tours a nation on the verge of superpowerdom, and it ends by suggesting the country’s industrialization means “the future of China may be the West’s past.”

One excursion hardly makes me a China guru, but I can report with some confidence that when it comes to economic growth, Wong is right. China is walking in our shoes — and that’s not necessarily a good thing.

On my trip (which you can read more about at Openleft.com), I’ve seen America circa 1900: coastal metropolises of towering wealth hemming in a polluted and destitute heartland. Two Chinas, as John Edwards might say — one you constantly hear about and another hidden from view.

In Hong Kong, I gaped at the sleek office towers, fine restaurants and nouveau riche — the “miracle” endlessly celebrated by the New York Times’ Tom Friedman (China is a place of “wide avenues, skyscrapers, green spaces, software parks and universities”), Newsweek’s Fareed Zakaria (“China’s growth has obvious and amazing benefits for the world”), and most of America’s Very Serious Commentators. Indeed, according to MIT’s Yasheng Huang, China’s most famous cities are known for tricking incurious observers into portraying the entire country as “sanitary … largely free of grotesque manifestations of poverty (and) one of the most successful countries in tackling income inequality.”

Of course, in Guiyang, a coal-mining town of 3 million in China’s poorest province, I found exactly the opposite — the darker side of the “miracle.”

Here in the countryside is the soundstage of a post-apocalyptic sci-fi flick — filth-covered tenements slapped together with crumbling cement and kitchen tile; limbless paupers with burned faces begging for food; an atmosphere choked by soot, exhaust and the stench of human excrement.

Scholars insist this is the unavoidable consequence of a country being run by the Chinese Communist Party — an extreme version of the Republican Party that couples Genghis Khan’s intolerance with Hank Paulson’s authoritarian capitalism. Pundits assert that China’s inequality, which according to World Bank data now rivals our own Gilded Age, is just a necessary evil — the obligatory pitfall of nonetheless positive Western-style development. And while some Americans may lament international poverty, many are too distracted or unsympathetic to care about seemingly far-flung tragedies.

But, then, the challenges China poses aren’t about Save-the-Children altruism, and they aren’t distant triflings. As none other than “Big Trouble in Little China” presciently warned, China is here — and we cannot simply cite inevitability as reason to ignore its metastasizing problems.

We’re not talking about the United States in 1900 — a country of only 76 million people pigheadedly despoiling its way into the 20th century. It’s 2009, the planet’s already on the brink of resource exhaustion and climate catastrophe, and China is 17 times more populous than America during our industrial era.

If we just sit back and listen to those who pooh-pooh “necessary evils” and celebrate supposed “miracles”; if governments refuse to strengthen international environmental policies; if the world merely hopes for the best as 1.3 billion Chinese pursue old-school smokestack industrialization, then there’s not going to be much of a world left.

Our future won’t be that gleaming Hong Kong skyline we keep being told about — it will be downtown Guiyang.

JJS: What to do about it? Geonomize. Economic justice is a powerful tool and we neglect it to our detriment. Because prices matter, because people are spurred by costs and benefits, what also matter are taxes and subsidies. When government gets them right, it lets prices become right. And people become economic actors in line with the needs of the planet.

How should China and the rest of us do revenue policy? Geonomically. Shift taxes off the values we make, onto the values we take. Tax pollution, depletion, and exclusive use of location. Complimentarily, shift subsidies from special interests to the general populace, perhaps most efficiently via a Citizens Dividend. Do this — geonomize — and your development will fall within environmental constraints.

Geonomics has worked wherever tried. Indeed, its what Hong Kong and Tsing-tao used to develop, and more justly, than almost anywhere else.

Our editor published The Geonomist which won a Californian GreenLight Award, has appeared in both the popular press (e.g., TruthOut) and academic journals (e.g., USC’s Planning and Markets), been interviewed on radio and TV, lobbied officials, testified before the Russian Duma, conducted research (e.g., for Portland’s mass transit agency), and recruited activists and academics to the Forum on Geonomics. A member of the International Society for Ecological Economics and of Mensa, he lives in America’s Pacific Northwest.

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Arts & Letters

Geonomics is …

what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, in-cluding the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.

not a panacea, but like John Muir said, “pull on any one thing, and find it connected to everything else.” Recall last month’s earthquake in El Salvador. We felt it and its formidable after-shocks in Nicaragua. Immediately afterwards, my host nation, one of the poorest in the Western Hemisphere, sent aid to its Central American neighbor. The Nica newspapers carried photos of the devastation. They showed that the cliff sides that crumbled had had homes built on them while the cliffs left pristine withstood the shock. Could monopoly of good, safe, flat land be pushing people to build on risky, unstable cliffs? If so, that’s just one more good reason to break up land monopoly. What works to break up land monopoly, history shows, is for society to collect the annual rental value of the underlying sites and resources. That’d spur owners to use level land efficiently, so no one would be excluded, forced to resort to cliffs. To prevent another man-induced landslide is yet another reason to spread geonomics.

one of many words I coined over 20 years ago: geoism, geonomics, geonomy, geocracy, etc – neologisms that later others came up with, too. CNBC once had a Geonomics Show, and Middlebury College has a Geonomics Institute. If “economy” is literally “management of the household”, then geonomy is “management of the planet”. The kind of management I had in mind is not what CNBC was thinking – top-down. My geonomics is not hands-on, interfering, but hands-off, organic. It’d strive to align policy with natural processes, similar to what holistic healing does in medicine, what organic farming does in agriculture. Geonomics attends to two key components: One, the crucial stuff to track is fat — or profit, especially profits without production, such as rent, or all the money we spend on the nature we use. Society’s surplus is the sine qua non for growth, needed to counter death – not merely more, but sustainable development, more from less. Two, the basic process to respect is the feedback loop. These let nature maintain balance automatically and could do the same for markets, if we let them. Letting them would turn our economies, now our masters, into a geonomy, our servant, providing us with prosperity, eco-librium (to coin a term) and leisure, time off — a hostile environment for economan but a cradle for a loving and creative humanity.

a POV that Spain’s president might try. A few blocks from my room in Madrid at a book fair to promote literacy, Sr Zapatero, while giving autographs and high fives to kids, said books are very expensive and he’d see about getting the value added tax on them cut down to zero. (El Pais, June 4; see, politicians can grasp geo-logic.) But why do we raise the cost of any useful product? Why not tax useless products? Even more basic: is being better than a costly tax good enough? Our favorite replacement for any tax is no tax: instead, run government like a business and charge full market value for the permits it issues, such as everything from corporate charters to emission allowances to resource leases. These pieces of paper are immensely valuable, yet now our steward, the state, gives them away for nearly free, absolutely free in some cases. Government is sitting on its own assets and needs merely to cash in by doing what any rational entity in the economy does – negotiate the best deal. Then with this profit, rather than fund more waste, pay the stakeholders, we citizenry, a dividend. Thereby geonomics gets rid of two huge problems. It replaces taxes with full-value fees and replaces subsidies for special interests with a Citizens Dividend for people in general. Neither left nor right, this reform is what both nature lovers and liberty lovers need to promote, right now.

an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”
Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.

a study of a phenomenon David Ricardo noted going on two centuries ago. When wine grapes rise to $10,000 a ton from the very best land (last year, cabernet sauvignon commanded an average of $4,021 a ton in the Napa Valley), then vineyard prices soar from $18,000 an acre in the 1980′s to $100,000 an acre five years ago and now for a top pedigree up to $300,000 an acre (The New York Times, April 9, via Wyn Achenbaum). Pricey land does not make wine pricey; spendy wine makes land spendy. While vintners make their wine tasty, nature and society in general – not any lone owner – make land desireable. Steve Kerch of CBS’s MarketWatch (April 5) notes that much of what a home sells for on the open market is a reflection of intangible factors such as what school district the house sits in. The price the builder has to pay for the land also tends to be driven by the same intangibles. Because the value of land comes from society, and because one’s use excludes the rest of society, each user owes all others compensation, and is owed compensation by everyone else. Sharing land’s value, instead of taxing one’s efforts, is the policy of geonomics.

what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, including the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.

a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old log-gers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.

a study of Earth’s economic worth, of the money we spend on the nature we use, trillions of dollars each year. We spend most to be with our own kind; land value follows population density. Besides nearness to downtowns, we also pay for proximity to good schools, lovely views, soil fertility, etc. These advantages, sellers did not create. So we pay the wrong people for land. Instead, we should pay our neighbors. They generate land’s value and deserve compensation for keeping off ours, as they’d pay us for keeping off theirs. It’s mutual compensation: we’d replace taxes with land dues – a bit like Hong Kong does – and replace subsidies with “rent” dividends to area residents – a bit like Alaska does with oil revenue. Both taxes and subsidies – however fair or not – are costly and distort the prices of the goods taxed and the services subsidized. By replacing them and letting prices become precise, we reveal the real costs of output, the real values of consumers. Then, just by following the bottom line, people can choose to conserve and prosper automatically. A community could start by shifting its property tax off buildings, onto land – a bit like a score of towns in Pennsylvania do; every place that has done it has benefited.

a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?